July 18, 2019 / 8:57 AM / a month ago

Philippines revises 2019-2022 forex assumptions, keeps growth targets

FILE PHOTO: A woman scans the selection of canned goods at a grocery store in Makati City, Metro Manila, Philippines, September 19, 2018. REUTERS/Eloisa Lopez/File Photo

MANILA (Reuters) - The Philippines on Thursday revised its foreign exchange assumptions for its medium-term macroeconomic targets as it expects the peso to appreciate against the dollar on positive investor sentiment.

The forex assumption is now 51-53 pesos to the dollar for 2019, and 51-55 from 2020 to 2022, from 52-55, said Janet Abuel, officer-in-charge at the Department of Budget and Management.

Abuel said the government is expecting the peso to trade firmer against the dollar “with easing inflation pressures and positive market sentiment with the recent sovereign credit rating upgrade of the Philippines”.

The peso has gained nearly 3% against the dollar so far this year, and was trading at around 51 on Thursday.

The government also lowered its inflation assumption for this year to 2.7%-3.5% from 3%-4%, Abuel said.

For 2020, the government will propose a 12% increase in the national budget to 4.1 trillion pesos ($80.27 billion), equal to 19.4% of gross domestic product, Abuel said, so it could spend more on infrastructure and support economic growth.

Manila kept its 6.0%-7.0% growth target for this year. Next year’s 6.5%-7.5% growth goal and the 7%-8% percent growth target for 2021-2022 were also maintained.

Reporting by Karen Lema; Editing by Kim Coghill

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